Is Your 40% in Bonds Losing to Inflation? Aptus CIO Makes the Case for an Options-Based Approach

In an ETF.com video, Aptus founder and CIO JD Gardner argues that the common 40% bond allocation rests on flawed assumptions about bonds protecting equities and delivering real returns. He traces 60/40 to a period when rates fell from 17% to zero, discusses a fiscal deficit as a more honest hurdle rate for bonds than CPI, and describes holding more stocks and fewer bonds while keeping drawdown risk in check. The conversation also covers options-based ETFs and buffer ETFs, including what advisors should compare when choosing buffer funds.

1. Gardner argues that the assumptions bonds will protect equities and deliver real returns are flawed.
2. He says the 60/40 model was born in an era of rates falling from 17% to zero.
3. He sees a fiscal deficit as a more honest hurdle rate for bonds than CPI.
4. He discusses options-based ETFs and what to compare when choosing buffer funds.